Credit cards are not only convenient and secure payment methods, but also powerful financial tools that can help you build your credit history, earn rewards, and save money. However, getting a credit card is not easy for students under 21 in the United States, as they have to meet certain eligibility criteria and comply with the Credit CARD Act of 2009. In this blog post, we will explore the features, benefits, and drawbacks of student credit cards for those under 21 in the United States, and list some of the best options available in the market.
What are student credit cards?
Student credit cards are specially designed for college students who want to access credit and learn financial responsibility. They usually have lower credit limits, higher interest rates, and fewer rewards than regular credit cards, but they also have some advantages such as no annual fee, easy approval, and student-friendly perks. Student credit cards can help you establish a good credit score, which can benefit you in the future when you apply for loans, mortgages, or other credit products.
How to get a student credit card if you are under 21 in the United States?
According to the Credit CARD Act of 2009 student credit cards under 21 ssuers cannot provide cards to people under 21 unless they have proof of independent income or a co-signer. This means that you have to show that you have a steady source of income from a job, scholarship, or other means, or you have to ask a parent or another trusted adult to co-sign for you on the credit card application. A co-signer is someone who agrees to be responsible for the debt if you fail to pay the bill.
Another option is to get a secured credit card, which requires you to deposit a certain amount of money as collateral. The deposit acts as your credit limit and reduces the risk for the issuer. Secured credit cards are easier to get than unsecured ones, and they can also help you build your credit history. However, they may have higher fees and lower rewards than student credit cards.
Minimum Eligibility To Get Student Credit Cards If You Are 21?
It is technically possible to get a credit card on your own.
Issuers will require you to have an independent income, which most college students do not have.
If you’re under 21 and don’t have your own income, you will need a parent or another trusted adult to co-sign for you on a credit card application.
If you’re over 21, credit card restrictions are not as tight.
You’ll still need to demonstrate that you have income because issuers want to know that you can pay back what you spend.
You can include any income to which you have reasonable access, such as the income of a partner or spouse.
Sure, here are the eligibility criteria for student credit cards for under 21 in columns for the USA:
| Bank | Age | Income | Co-signer | Credit score |
|---|---|---|---|---|
| Discover | 18+ | None | Yes | Not required |
| NerdWallet | 18+ | None | Yes | Not required |
| U.S. News | 18+ | Enough income to cover any debt you incur | No | Not required |
| Bankrate | 18+ | Proof of independent income | Yes | Not required |
Getting A Student Credit Card at 21 Help You with?
Getting a student credit card at the age of 21 can help you in several ways. Here are some benefits of having a student credit card:
Learn positive credit habits:
Getting a credit card also helps young people learn positive financial habits, including tracking their spending and paying their bills on time. These habits can help you avoid financial problems in the future.
Access rewards and other perks:
A student credit card entitles the holder to numerous benefits such as cashbacks, discounts, and deals that the bank offers. Some banks even provide cashback on refueling vehicles. Besides, you will earn reward points that can be redeemed for attractive offers.
Use the card for emergencies:
A student credit card can be used for emergencies. For example, if your car breaks down and you need to pay for repairs, you can use your credit card to pay for it.
Credit cards are convenient and safer to use:
Credit cards are convenient and safer to use than cash. You don’t have to worry about carrying large amounts of cash with you or losing it. Also, if your credit card is lost or stolen, you can report it to the issuer and they will cancel the card and issue you a new one. Is there anything else I can help with?
What are the benefits of student credit cards?
Student credit cards have several benefits that can make them worth getting if you are under 21 in the United States. Some of them are:
Building your credit history:
Having a good credit history is important for your financial future, as it affects your ability to get loans, mortgages, insurance, and even jobs. By using your student credit card responsibly and paying your bills on time, you can improve your credit score and show lenders that you are trustworthy.
Earning rewards:
Some student credit cards offer rewards such as cashback, points, or miles that you can redeem for various things such as travel, merchandise, gift cards, or statement credits. Rewards can help you save money or enjoy some perks while spending.
Getting discounts:
Many student credit cards also offer discounts or deals on various products or services that are relevant for students. For example, you may get discounts on books, movies, food delivery, online shopping, or subscriptions.
Learning financial skills:
Having a student credit card can teach you valuable financial skills such as budgeting, managing debt, and avoiding interest charges. You can also learn how to read your credit card statement, understand your fees and rates, and monitor your credit report.
What are the drawbacks of student credit cards?
Student credit cards also have some drawbacks that you should be aware of before applying for one. Some of them are:
High-interest rates:
Student credit cards tend to have higher interest rates than regular credit cards, as they are considered riskier by issuers. This means that if you carry a balance on your card from month to month, you will have to pay more interest charges than usual. Interest charges can quickly add up and eat into your savings or rewards.
Low credit limits:
Student credit cards usually have low credit limits, as issuers want to limit their exposure and encourage responsible spending. This means that you may not be able to use your card for large purchases or emergencies. Low credit limits can also affect your credit utilization ratio, which is the percentage of your available credit that you use. A high utilization ratio can lower your credit score and signal that you are overextended.
Potential fees:
Student credit cards may also charge fees for various things such as late payments, returned payments, foreign transactions, cash advances, or balance transfers. These fees can add up and increase your debt if you are not careful. You should always read the fine print of your card agreement and avoid any actions that may trigger fees.
Credit cards can also pose a risk of debt if you misuse them or fail to pay them off in full every month. Debt can negatively affect your credit score and your financial health in the long term. It can also cause stress and anxiety, which can interfere with your academic performance and well-being. You should always use your student credit card wisely and only for necessary expenses that you can afford to repay.
Some of the best student credit cards for those under 21 in the United States?
There are many student credit cards available in the market, but not all of them are suitable for students under 21 in the United States. Here are some of the best options that you can consider, based on their features, benefits, and drawbacks:
Discover it® Student Cash Back:
This is one of the best student credit cards for those under 21 in the United States, as it offers generous rewards, low fees, and a unique welcome bonus. You can earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, and gas stations up to the quarterly maximum when you activate, and 1% cash back on all other purchases. You also get a $20 statement credit each school year if your GPA is 3.0 or higher for up to the next five years. There is no annual fee, no foreign transaction fee, and no late fee on your first late payment. The best part is that Discover will match all the cash back you’ve earned at the end of your first year automatically. The only downside is that Discover cards are not widely accepted outside the United States.
Bank of America® Travel Rewards Credit Card for Students:
This is a great student credit card for those under 21 in the United States if you love to travel or study abroad. You can earn unlimited 1.5 points per $1 spent on all purchases everywhere, every time and no expiration on points4. You can redeem your points for travel expenses such as flights, hotels, car rentals, or cruises with no blackout dates or restrictions4. You also get a 25,000 points bonus after you make at least $1,000 in purchases in the first 90 days of account opening4. There is no annual fee and no foreign transaction fee. The only drawback is that the interest rate is relatively high compared to other student credit cards.
Capital One Quicksilver Student Cash Rewards Credit Card:
This is a simple and straightforward student credit card for those under 21 in the United States that offers flat-rate cash back on all purchases. You can earn unlimited 1.5% cash back on every purchase, every day. You also get a $50 cash-back bonus when you spend $100 in the first three months. There is no annual fee and no foreign transaction fee. The only downside is that the interest rate is variable and may change depending on the market conditions.
Capital One SavorOne Student Cash Rewards Credit Card:
This is an ideal student credit card for those under 21 in the United States if you enjoy dining out or ordering food online. You can earn unlimited 3% cash back on dining and entertainment, 2% at grocery stores (excluding superstores like Walmart® and Target®), and 1% on all other purchases. You also get a $50 cash-back bonus when you spend $100 in the first three months. There is no annual fee and no foreign transaction fee. The only downside is that the interest rate is variable and may change depending on the market conditions.